Thailand’s corporate bond market is bracing for a potential downturn, with financial experts forecasting a reduction in bond issuance by local corporations in 2025. This decline could result in a significant withdrawal of up to 50 billion baht from the financial markets, stirring anxiety among investors.
The country has been grappling with consecutive blows to its bond market, attributed to a series of fraud incidents, mismanagement, and forced asset liquidations by company executives.
These issues have eroded corporate credit ratings and shaken market confidence, thus making new bond offerings less enticing. Companies such as Stark Corporation, Successmore Being, NR Instant Produce, Yggdrazil Group, Energy Absolute, JKN Global Group, and RS Group have all been caught in the crosshairs of this crisis.
Current predictions from Thailand’s Bond Market Association estimate corporate bond issuance for this year to lie between 850 billion baht and 900 billion baht, equivalent to approximately $24.55 billion to $25.99 billion. This represents a decrease of up to 10% anticipated for 2024, marking the third consecutive annual decline following a peak issuance of 1.26 trillion baht in 2022.
Ariya Tiranaprakij, Executive Vice President of the Thai Bond Market Association, stated that companies showing signs of potential difficulties in repaying debentures must enter negotiations to extend their debts. It is not yet certain whether all companies will be able to repay postponed debts. However, the association has observed that many companies are taking measures in advance to prepare. Given the current sluggish economic conditions, it is likely that we will continue to see debenture payments being deferred this year.
“For new companies intending to issue bonds, they must be of relatively high quality, adhering to the enhanced criteria set by the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC). Nevertheless, if the economy does not recover as hoped, existing debentures facing liquidity issues may still lead to debt extension negotiations. Since January 2025, there have already been at least two companies that have announced bondholder meetings.”
Several companies have faced downgrades in their bond credit ratings, with many experiencing a drop from BBB+ to levels below that. The number of companies undergoing credit downgrades has increased by 11 to a total of 46, compared to only 35 companies in the previous year. This trend reflects the broader economic landscape, which has yet to return to normal, impacting numerous businesses. However, on a positive note, 13 companies have seen their credit ratings upgraded during this period.
Meanwhile, there has been a noticeable decline in high-yield bond issuance over the past year. The high-yield sector, which lacks credit ratings or holds low ratings, saw a decrease in bond issuance by 50%, dropping to just 55 billion baht from the previous year’s high of 100 billion baht. In contrast, the investment-grade sector saw only a 10% decline in bond issuance value.
These developments underscore the challenges faced by Thai corporates as they navigate a sluggish economy, with companies in lower credit brackets bearing the brunt of the downturn, while those with stronger ratings continue to find more stable ground.
The trend highlights a challenging landscape for companies, particularly those with subpar credit ratings and non-investment grade bonds, as stricter regulatory measures continue to tighten. Meanwhile, stocks with higher-than-peer debt in the Thai exchange showed lackluster performance during Friday’s morning trading session, reflecting investor wariness amid the ongoing bond market challenges.
| Last Price | % Change | THB Change | % Change WTD | |
| EA | 3.46 | -5.46 % | -0.2 | -7.58 |
| MINT | 23.6 | -4.07 % | -1 | -5.38 |
| AWC | 3.26 | -2.98 % | -0.1 | -3.45 |
| CRC | 33.5 | -0.74 % | -0.25 | 2.27 |
| BEM | 6.85 | -2.14 % | -0.15 | -1.41 |
| BA | 20.8 | -1.89 % | -0.4 | -4.50 |
| TRUE | 10.9 | 0 % | 0 | -6.03 |
| AAV | 2.42 | -1.63 % | -0.04 | -4.65 |
| BGRIM | 17.2 | -0.58 % | -0.1 | -8.95 |
| BTG | 17.8 | -1.11 % | -0.2 | -2.70 |
| DOHOME | 8.9 | -1.11 % | -0.1 | 2.27 |
